Financially troubled Kingfisher Airlines has been suspended from the International Air Transport Association’s Clearing House (ICH) payment system.

The Indian carrier was suspended “as they did not settle their ICH account within the due time”, said an IATA spokesman when contacted.

The airline, however, said the suspension was a result of an “internal system failure”, resulting in insufficient credits in its ICH account.

“Kingfisher would like to confirm that all its dues via ICH have been settled in full and it has absolutely no outstanding due as of date,” added a spokewoman.

IATA, which has said that Kingfisher will be reinstated after the airline “fulfils the ICH requirements”, however reiterated that the airline is still under suspension.

The ICH system is used by hundreds of airlines to settle payments for interline agreements and around 80% of interline transactions are settled through it. With the suspension, Kingfisher’s revenue will likely suffer a further hit.

Shortly after Kingfisher was stopped from using the ICH, its planned entry into the Oneworld alliance was also put on hold. The airline was supposed to join the alliance on 10 February.

“We have been working closely with Kingfisher Airlines over the past months and it has become increasingly clear recently that the airline needs more time to resolve the financial issues it is confronting before it can be welcomed into Oneworld,” said Oneworld chief executive Bruce Ashby.